The Social Security Fairness Act has grabbed headlines, and rightly so. For the public sector worker, retiree, or any person dependent on benefits related to Social Security, this legislation might disrupt your finances. Learn more about the act—how it addresses issues and how it could change your benefits.
What is the Social Security Fairness Act?
The Social Security Fairness Act aims to repeal two federal policies: the Windfall Elimination Provision (WEP) and the Government Pension Offset (GPO). These policies reduce Social Security benefits for workers who also receive pensions from state or federal jobs that do not participate in the Social Security system.
- Windfall Elimination Provision (WEP): This impacts individuals who qualify for Social Security based on other work history but also receive a public pension. It can significantly reduce their benefits.
- Government Pension Offset (GPO): This affects spousal or survivor benefits, reducing what a retired worker’s family members can receive.
Combined, these provisions impact nearly 3 million retirees, including teachers, police officers, firefighters, and postal workers.
Why are people calling for change?
Many people feel that the WEP and GPO unfairly penalize those who have worked hard in public service. The argument is simple: public sector workers pay into their pension systems, just like private sector employees pay into Social Security. Yet under these provisions, public servants often get reduced benefits.
Ohio Senator Sherrod Brown summed it up well: “All these workers are asking for is what they earned.” He added that Social Security should be a reliable safety net for everyone, especially those who have contributed to the system in one way or another.
Louisiana Senator Bill Cassidy also shared a personal story, recalling a retired teacher who was confused and upset about receiving less in Social Security spousal benefits than if she had never worked at all.
How could the act affect you?
If passed, the Social Security Fairness Act would:
- Restore full benefits: Public sector retirees would no longer have their Social Security payments reduced by WEP or GPO.
- Increase spousal and survivor benefits: Families would gain more financial security by receiving full benefits as intended.
- Boost overall retirement income: With fewer reductions, retirees could see a meaningful difference in their monthly income.
For retirees already struggling to make ends meet, these changes could be a game-changer.
What are the concerns about the act?
Critics of the Social Security Fairness Act say that the price is massive. The Congressional Budget Office estimates that the repeal will add almost $200 billion to the federal deficit over the next decade.
North Carolina Senator Thom Tillis expressed concern, labeling the bill as “unfunded mandates” that could eventually jeopardize the solvency of Social Security. Others, meanwhile, claim that at best, it would fail to cover the main issue: that of the long-term financial sustainability of Social Security.
Where does the bill stand now?
The Social Security Fairness Act has bipartisan support and recently cleared a major hurdle in the Senate. However, it still needs final approval before it can head to the President’s desk. Without action soon, the bill may need to be reintroduced in the next congressional session.
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